The one stipulation for being eligible for bankruptcy is that you have to actually be insolvent. This means either not being able to afford to repay your debts as and when they are due or having debts which are higher in value than your assets. When you get finished reading this article, if you have any additional questions, be sure to visit Fisher-Sandler, LLC Fredericksburg, VA
For most people bankruptcy is their worst nightmare and they will do anything possible to avoid it, but for some it's an effective way to deal with their debts:
2) Unemployed individuals.
3) People with no valuable assets such as a house or vehicles.
It's important to note that student loans cannot be included in your bankruptcy and these will be treated separately and must be paid off in full. Bankruptcy is often perceived by people as a magic wand to get rid of their mounting debts but the reality is very different.
It's therefore vital that you speak to a bankruptcy attorney before looking at bankruptcy as a solution. What seems like an impossible situation to you may actually be suitable for another type of debt solution.
In many cases, bankruptcy results in people losing their homes and jobs which is why it's always a last resort for the majority of the population.
Now let's talk pros and cons.
Bankruptcy is never pleasant, no matter what your individual circumstances are but here are a few of the main advantages:
1) After 12 months your bankruptcy order will be lifted and your outstanding unsecured debts written off.
2) Once your bankruptcy order is in place, your creditors are legally obliged not to contact you again.
3) You will still be allowed to keep household and personal items, nobody will visit your home to take all your possessions away.
1) Details of your bankruptcy will be made available in the public domain.
2) You could lose your house and job as many professions don't permit bankrupts.
3) You will typically have to pay an agreed monthly amount for 3 years, known as an Income Payment Order.
4) Your credit file will contain details of your bankruptcy for 6 years.
5) During the 12 months of your bankruptcy order there are a number of restrictions placed on you such as not being able to act as a company director or take out a mortgage.